Do you have a futures strategy or commodity strategy in place for potential inflation of the Dollar?

Investors need to be aware of what is going on here because it will affect their investment portfolio. The Fed has been purchasing securities for a few years now and it does not seem to be working.

Chicago, IL (prHWY.com) January 19, 2013 - The Federal Reserve has continuously been providing stimulus action in an attempt to create economic growth and bring down unemployment. I can't blame them since our elected officials in Washington don't seem to be doing anything. The stimulus the Federal Reserve is providing has been labeled as reckless by some necessary by others. The Fed is purchasing securities, mostly Treasuries, in order to bring down interest rates to the point where investors and companies seek other avenues for a return on their money. By forcing companies, including banks to seek profit else where the Fed hopes they will put the money to work in the marketplace as loans and debt for companies creating artificial supply of money that will hopefully get the economy going and create jobs. Many economists associate the actions by the Fed as printing money. Printing money is always associated with inflation as it increases the supply of money and decreases the value of the currency, in this case the dollar.

The Fed has no signs of slowing down with its measures. It has lowered interest rates as low as possible and fiscal policy is not working. The only tools available to the Fed are those that affect money supply and the purpose of the Fed is keep inflation at a reasonable rate while maximizing employment. In the current time we have high unemployment and very low inflation. Until we see a drastic decrease in unemployment or a drastic increase in inflation I do not see the Fed stepping aside.

Investors need to be aware of what is going on here because it will affect their investment portfolio. The Fed has been purchasing securities for a few years now and it does not seem to be working. They can't simply sit by and do nothing so I believe they will continue the purchase of securities until it is working, fiscal policy is put in place to do something, or their actions begin to have a negative effect. Investors need to have a properly diversified portfolio in case things take a turn for the worse. If Washington is unable to come up with a fiscal policy or legislation to create jobs and the Fed continues their actions until inflation does occur we will then have high unemployment and inflation. Imagine what that will do to the value of your stock portfolio. Companies will have an increased cost of borrowing and could send the economy back into a recession. This is all bad for the economy and your stock portfolio if we see inflation before jobs growth. Managed futures are an investment vehicle that investors need to look into to diversify their portfolio. Commodity trading companies or CTA's manage futures accounts for individual investors. This gives investors exposure to the futures market and provides them a commodity strategy or futures strategy that can profit from inflation while their stock portfolio takes a dive. These commodity trading companies provide investors a specific commodity strategy or futures strategy in their disclosure document and investors can choose a managed futures account manager based on their risk tolerance.

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Tag Words: companies, commodity trading, futures strategy, commodity strategy

Categories: Finance

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